Without continuous improvement, an enterprise tends to atrophy. Product revenue tends to decline; process inefficiencies tend to accumulate; and competitiveness tends to become impaired. To remain healthy and competitive, an enterprise must actively reinvent itself. Typically, opportunities to better the enterprise arise from many sources. Enterprise research and development (R&D) activities explore capabilities significantly different from those currently possessed by the enterprise. Competitive research and analysis suggest changes needed to meet or exceed the capabilities possessed by other industry players. Market research explores the changing needs of customers and exposes new forces and patterns of behavior and desire that drive change. Business development identifies new partnerships or relationships that could add value to the enterprise. Operations uncover inefficiencies and gaps that if corrected would make the enterprise stronger. Strategic business planners and executives set overall direction for the enterprise. This universe of potential change represents alternate futures of the enterprise. Considerable money and time may need to be invested in making a change before it begins to return value. Enterprises typically have limited budgets for investing in change. It is vital to select the correct projects to fund because funding the wrong changes may leave the enterprise in a weakened marketplace position. Also, poor selection reduces cash flow, depletes the funds available for change, and ultimately means that there are fewer resources to invest in other change projects.
Enterprises need to look well into the future, to anticipate the economic environment in which they will be operating, and to develop a plan for achieving success in that future economic environment. This activity may be called strategizing, and the product of this activity is a strategy or a strategic initiative. This activity is typically performed by high level executives and by specialized staff dedicated to strategic planning, well removed from the day-to-day operational details of the enterprise. For these strategies to benefit the enterprise they must be translated to operational activities.